Joint Life Insurance Principles
September 9, 2016
Why choose joint life insurance?
Comprehensive joint life cover is handy because you and your spouse get cover under one contract. What people fail to understand with joint life insurance is that if a married couple goes for a joint policy, and both die in the same car accident, for instance, their dependents will receive ONE lump sum only from the policy and not two.
A disadvantage with a joint policy is that there could well be issues over who is entitled to a payout. If one of the partners runs off with someone else and remarries, then that’s it. There’s going to be dissension about who gets the payout.
A joint policy also ensures your family are secure when you’re not there anymore. The way it works is that the policy will pay out on what is known as a first claim basis, meaning the payout occurs when the first policy holder dies. Then the insurance ends.
With some policies, there is a payment made on the death of both the two people insured. Joint life cover is for any interdependent relationship, where if one of the two passes away, the other will face financial difficulties.
Joint Life Insurance – There’s so Much to Find Out
What kind of policy do you want to purchase? Are you looking for cover right up to the time you retire for say 20 years? Another important aspect is finding out whether the benefit adjusts to inflation and what the restrictions or exclusions are.
When couples are considering whether they need a joint life term policy or a separate term policy, they need to do research and find the pros and cons of each. Joint life cover insures both under the same terms and conditions in the policy. If you take out separate policies, however, then aspects such as costs as well as terms and conditions can be selected individually according to preferences.
Joint Life Insurance – There are Disadvantages
Once the first person dies, single payout plans, for instance, will leave the surviving policyholder without life cover. The disadvantage with this is that possibly the remaining member will now be a lot older and possibly have health issues. Trying to buy life cover will now cost a lot more.
Another disadvantage is that if the couple split, the policy can’t be divided. If one partner doesn’t pay their share of the premium, the policy will cease. That’s unless the other partners opt to pay now double. So what’s good about joint life cover then? Some of the advantages are –
- Fair payment options – in all aspects, joint life insurance is less expensive than an individual life insurance plan. Just remember that the cost and coverage you get will vary based on the provider as well as the plan you choose
- Affordability – the cost of protecting two people instead of one is cheaper.
- Protects both parties, meaning that whichever partner passes away first, the other one can rely on a payout.
Whether you go for a single or joint policy, check out life insurance quotes from a variety of providers so you get the best deal. Individual and joint life insurance policies each have their pros and cons.
Premiums and features can vary quite a bit, so do your research before you buy.|
When you’ve made your decision, it’s also wise to think about how to make sure your dependents can access your payout with the lowest possible tax charge.
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All info was correct at time of publishing